Coronavirus Self-Employment Income Support Scheme

Chancellor Rishi Sunak yesterday announced aid for the self-employed and freelance workers which may come as welcome news for many PGA members who are registered as self-employed.

After last week’s package of economic measures failed to provide measures for self-employed these measures now represent an unprecedented level of support and assurance.

Summary of yesterday’s announcement:

The Coronavirus Self-Employment Income Support Scheme

  • If they have suffered a loss in income self-employed are able to apply for a grant worth 80% of their average monthly profits over the last three years, capped at £2,500 per month
  • Scheme is open only to those who are already self-employed and have a self-assessment tax return for 2019
  • Applies to those with a trading profit of less than £50,000 in 2018-2019 or an average trading profit of less than £50,000 from 2016-2017, 2017-2018 and 2018-2019
  • Grants available across the UK for initially three months

Although more details are to be released, we also know:

  • Grants will be backdated to March
  • Will be paid in a lump sum for all three months and will start to be paid the beginning of June
  • The grants will be taxable and will have to be declared as income on tax returns due by January 2022

There are some important caveats that have not necessarily hit the headlines but are worth knowing:

  • Those who became self-employed recently who do not have a 2019 self-assessment tax return will not receive any help under this scheme – their option is to refer to the benefits system, however, the Chancellor has announced those applying for universal credit should be paid within a few days.
  • Company owners who pay themselves a salary and dividends through their own company are not covered by this scheme but will have 80% of their salary covered if operating through PAYE.
  • At least half of claimant’s income needs to have come from self-employment as registered on their 2018-2019 tax return filed in January

How to Claim

  • People do not contact HMRC now – HMRC will directly contact those they know to be eligible and invite those eligible to apply online
  • Those who are contacted will need to confirm they meet the eligibility requirements
  • Grants will be paid straight into bank accounts
  • More information on the scheme and additional help for the self-employed can be found here.

We know that PGA members have many types of arrangements as employers, as employees or as self-employed (and sometimes both) so we will continue to work to interpret these new schemes to find relevant ways to assist. The PGA and our key advisors will continue to work on the detail as it becomes available to make it as relevant as possible to our Members.

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